Electronic Hardware Technology Park
Electronic Hardware Technology Park
The Ministry of Electronics and Information Technology, Government of India, has launched the Electronic Hardware Technology Park Scheme to encourage the entrepreneurs in establishing manufacturing units of the electronic hardware equipment. The scheme focuses on promoting entrepreneurs in setting up Hardware Technology Parks anywhere in India to export their produced electronics goods. Several benefits and assistances are provided under the export-oriented scheme to enhance the production and export of electronics goods and services.
Objectives of the Scheme
The scheme targets on accomplishing the following objectives:
- To encourage entrepreneurs in establishing Electronic Hardware Technology Parks in India (EHTPI)
- To enhance the production and exportation of electronics goods and services
- To increase the revenue of the country with the capital investment from foreign entrepreneurs
- To generate more employment opportunities
Benefits of the Scheme
The Electronic Hardware Technology Park Scheme is implemented with the following features:
- The Central Government, State Government, Public or Private sector undertakings or an individual can establish the technology park in any part of India.
- The scheme encourages foreign investment and provides provision for 100% Foreign Equity investment through automatic route
- Capital goods, raw materials, components and other such goods can be procured and imported with Duty-free services under the scheme
- As per the provisions Under Section 10A/10B of Income Tax Act, the eligible entrepreneurs can obtain the Income Tax exemption from the export profits.
- The EHTP units are discharged from the payment of corporate income tax for five years in the first eight years of its commercialisation.
- The Net Foreign Exchange (NFE) obtained by the unit can be merged with the NFE of its head or associate company in the Domestic Traffic Area (DTA). It would benefit the parent or associate company in obtaining the Export House/Trading House/Star Trading House status.
- EHTP units can get 100% Foreign Equity benefits under the scheme.
- The units can import all the goods required for the manufacturing from bonded warehouses in the Domestic Tariff Area (DTA) for Duty-free under the Export-Import (EXIM) Policy.
- Entrepreneurs can claim Refundable Central Sales Tax for their units.
- DTA Sales, DTA sales permissible up to 50% of FOB value of exports, subject to fulfilment of positive NFE, on payment of concessional duties (50% of basic customs duty and full excise duty). DTA sales beyond this entitlement are permissible against payment of full duties provided the unit has achieved positive NFE.
- Approvals are provided under the single window clearance system
- The project cost with the minimum value of100 million is approved speedily by the authorities.
- Outsourcing between EOU/STP/EHTP/EPZ is approved under the scheme.
- CST charges paid by the entrepreneurs can be reimbursed under the scheme.
The eligible beneficiaries under the scheme are as follows:
- Micro, Small and Medium entrepreneurs with an aim to expand production and exportation of electronic goods and services
- Any public and private sector undertakings
The scheme is monitored by the Department of Electronics, Government of India, New Delhi. A separate Inter-Ministerial Standing Committee (IMSC) is set up under the Chairmanship of the Secretary, Department of Electronics, to review and process the applications submitted by the entrepreneurs.
The preconditions which the eligible beneficiaries should fulfil in order to get the benefits under the scheme are as follows:
- Enterprises should meet the Minimum Export Performance standards, which are one million USD or threefold CIF value of imported goods, whichever is more.
- Positive Net Foreign Exchange Earnings against the Export Earnings must be attained over the duration of five years.
- The EHTP units should be a Net Foreign Exchange Earner. Supplies of ITA-1 items produced by such units in the Domestic tariff Area (DTA) would be considered under the scheme.
The applicants must submit the following mandatory documents while applying for the benefits under the scheme,
- Application Form
- Detailed Project Report of the unit
- A copy of Board Resolution document
- Memorandum and/or Articles of Association
- Export Order or Memorandum of Understanding
- The name and other details of the Board of Directors
- Exporter and Importer code number
- Address proof of the Technology Park location.
- Verified data communication proof such as Payment receipt, Service acceptance report etc.
The applicants can apply for both automatic and manual registration to claim the benefits under the scheme. The eligible applicants can follow the below procedures to apply for the scheme:
- Application form duly filled in and signed by the applicant should be submitted to the Director of EHTPI. The application form must be stamped on each page.
- A Demand Draft of Rs.2,500 in favour of Director, EHTPI within their respective jurisdiction of the unit should be enclosed with the application form.
- The Detailed Project Report including the details of the promoter’s background, units’ area of expertise, services offered, marketing strategy and arrangements, manpower plan of the unit and other relevant documents should be provided.
- The Director verifies the application and documents. Then, acknowledges the receipt and provides a reference number to each of the applicants.
- The applicants should demonstrate the presentation about their project in the EHTPI office and
- The Letter of Permission is offered to the applicant by the Director on the approval of the project
The criteria under which the projects are approved are as follows:
- The LoP issued by the Director, EHTPI would be considered as the license for all activities under the scheme, including the purchase of raw materials. All the specifications related to the project such as manufacturable items, amount of imported capital goods, project export report for the last 5 years, location of the unit, working period, rejects in the DTA and sales report of the finished products.
- The entrepreneur should agree to the terms and conditions of the EHTPI and send an acceptance letter to the Director.
- The applicant should then perform the Legal Undertaking with the Director, EHTPI and the procedure to perform legal undertaking are as follows:
- A stamp paper of Rs.50 purchased from the Civil court should be stamped, signed and submitted by the applicant.
- A copy of the Board resolution document duly authorised and signed by the Board of Director should be enclosed.
- The copy of the legal undertaking must be produced by the beneficiary to the Customs Office at the time Customs Bonding to claim the benefits.
- The applicant should obtain Private Bonded Warehouse License from the Customs and Single all-purpose bond and produce it before the Assistant Commissioner of Customs for the clearance under the exemption notification.
Other Terms and Conditions
The unit, while applying for the legal undertaking, should pay three-year advance services charges or a minimum fee of Rs.50,000 or as per the following norms:
- Export Projection Service Charges for the exports up to Rs.50 Lakhs per year should pay the service charges of Rs.15,000 per year
- For the exports more than Rs.50 Lakhs but up to Rs.300 Lakhs per annum, the service charge of Rs.50,000 per annum should be paid.
For the exports more than Rs.300 lakhs per annum, the service charge of Rs.1,00,000 per annum should be paid. In case of failure of payment, the unit should pay the custom and excise duty on Plant, Machinery, raw materials, components and other such goods.
Post by Arnold Thomas
IndiaFilings is India's largest online compliance services platform dedicated to helping people start and grow their business, at an affordable cost. We were started in 2014 with the mission of making it easier for Entrepreneurs to start their business. We have since helped start and operate tens of thousands of businesses by offering a range of business services. Our aim is to help the entrepreneur on the legal and regulatory requirements, and be a partner throughout the business lifecycle, offering support at every stage to ensure the business remains compliant and continually growing.